The Indian Petroleum Industry: Towards Branded Fuels

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Case Details:

Case Code : MKTG059
Case Length : 12 Pages
Period : 2002-2003
Pub Date : 2003
Teaching Note :Not Available
Organization : HPCL, BPCL, IOC Etc
Industry : Petroleum
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"As the market becomes competitive, brand management will require careful thought. Though differentiation remains the key to competitive advantage, it may no longer serve the purpose."

- Madan B Lal, Chairman and Managing Director, Hindustan Petroleum Corporation Limited.

"All players will have to focus largely on brand building and marketing to grow in the market place."

- Madhu Nainan, Editor, Petrowatch-India, commenting on the future of Indian Petroleum Industry.

The Launch of Branded Fuels

In July 2002, Bharat Petroleum Corporation1 (BPCL), one of the leading players in the Indian petroleum industry, launched premium grade petrol under the brand name, 'Speed'.

This was the first instance of an oil company launching branded fuel in the market. Soon, the two other leading oil companies, Indian Oil Corporation2 (IOC) and Hindustan Petroleum Corporation Ltd.3 (HPCL) also launched their own 'new generation' fuels.

While IOC's branded petrol was called 'Premium,' HPCL called it 'Power.' IOC and HPCL also launched branded diesel called 'Diesel Super' and 'Turbo Jet' respectively.

The Indian Petroleum Industry: Towards Branded Fuels - Next Page>>

1] BPCL was formed in the 1970s by the Indian government as a part of its nationalization drive for oil companies. Over a period of time, the government stake in the company was diluted from 100% to 66%. BPCL had an overall market share of 20% in 2002. The company had an extensive marketing infrastructure and a vast network of retail outlets (under the 'In & Out' and 'Pure for Sure' initiatives) across the country.

2] Indian Refineries and the Indian Oil Company were set up in 1958 and 1959 respectively with the objective of acquiring competence in oil refining and marketing. In 1964, these two companies merged to form IOCL. In 2003, it was the largest player in the downstream petroleum sector. IOCL is also the largest commercial undertaking in the country and is the only Indian company with a Fortune Global 500 ranking among the world's largest industrial and service companies (rank 226).

3] HPCL was first incorporated as Standard Vacuum Refining Company of India in 1952 and later named ESSO India. The company was renamed as HPCL in 1974. India's second largest integrated oil refining and marketing company, HPCL has an extensive infrastructure of refineries, cross-country pipelines, LPG bottling plants, and aviation service facilities. It owns a vast network of retail outlets and regional offices. The Indian government is the major shareholder with a 51% stake in the company.

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